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Government contractor settles qui tam lawsuit for $26.75M

For many private businesses, a service contract with the United States government is a highly-coveted prize. USAspending.gov notes that the U.S. government has paid out more than $8 billion dollars in contract deals. While many government contractors take care to ensure that they are accurate and ethical in their billing practices and dealings with the government agencies to which they provide goods and services, some regard a government contract as an opportunity to defraud the government and to essentially steal from U.S. taxpayers.

In 2008, under the False Claims Act, a woman by the name of Jennifer Perez filed a qui tam lawsuit alleging that her former employer Stericycle had engaged in activities to defraud "federal customers by withholding accurate pricing data," and, unbeknownst to these federal customers, taken steps to add "unallowable charges to each bill." In 2010, 12 states along with the District of Columbia and the U.S. federal government joined the lawsuit.

Earlier this week, Stericycle agreed to settle the lawsuit and pay plaintiffs $26.75 million. Despite the sizable settlement, Stericycle continues to deny all allegations of wrongdoing and the company insists that its decision to settle is simply to "avoid the delay, uncertainty and expense," of litigation.

In her original lawsuit, Perez claimed that Stericycle's deceptive billing practices resulted in an 18 percent hike every nine months in the payments made by federal clients. The states impacted include Virginia, Florida, Massachusetts and California. Those states impacted will receive a percentage of the settlement amount based upon the economic impact caused by the deceptive and illegal practices. Per qui tam legal procedures, Perez will also receive a portion of the settlement amount.

Source: Courthouse News Service, "Stericycle to Pay $26.75M to Settle Pricing Case," Charly Himmel, Oct. 29, 2015

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